Michael Kors: Why Investors Sale Could Be Good News

Shares of Michael Kors Holdings (KORS) have fallen 4% to $76.77 at 12:55 p.m. today after a founding investor sold its remaining stake in the company. Wells Fargo’s Paul Lejuez and team think the sale might be good news for Kors:

Bloomberg

KORS announced that majority shareholder Sportswear Holdings Ltd (SHL) will be selling their remaining 11.7MM shares or 6% stake in the company. SHL owners Silas Chou and Lawrence Stroll will be retiring from the board. SHL was a founder of KORS and also sold about 20% of their stake in the IPO and another roughly 25% prior to the most recent announcement, so this is not entirely unexpected. While typically viewed as a negative when insiders sell their entire stake, it may also help the company gain more independence on its board (and may avoid conflicts of interest if/when the company repurchases its China business)…

SHL, Michael Kors himself, and CEO John Idol jointly own KORS' license right in greater China (the entity is called Far East Holdings). At some point, it is likely that KORS will buyback this license and operate directly owned stores in China. Although there are formulas in place to help determine a fair price when the time comes, with SHL's owners Chou and Stroll no longer on KORS' board (and replaced by independent directors), there are fewer conflicts of interest, and it seems less likely the price paid will be biased (to be too high).

After today’s drop, shares of Kors have fallen 5.4% in 2014.

Updated: Disney Jumps On Strong Q3, All Segments Post Upbeat Results

Disney (DIS) was climbing higher in after hours trading Tuesday, following its better-than-anticipated third-quarter earnings report in which nearly every segment came in ahead of revenue and operating income expectations.

The company said it earned $1.28 a share on revenue of $12.5 billion. Analysts were looking for $1.17 a share on revenue of $12.2 billion.

Breaking down the individual segments, Media Networks' revenue of $5.51 billion was just below the $5.57 billion consensus, while operating income of $2.3 billion squeezed past the $2.25 billion Street estimate.

Parks and Resorts logged revenues of $3.98 billion and operating income of $848 million. Consensus was $3.96 billion in revenue and $786 million in operating income.

Studio Entertainment revenue of $1.81 billion beat the $1.66 billion consensus, while operating income of $411 million was well above the $255 million analysts expected.

Consumer products saw revenues of $902 million and operating income of $273 million. Consensus was $848 million and $256 million, respectively.

Interactive revenues of $266 million beat the $203 million consensus while operating income of $29 million was more than triple the $8 million estimate.

Analysts have continued to quantify the impact of blockbuster Frozen and Maleficent in recent months. In May Disney rose after it easily beat expectations as its logged record earnings in its second quarter.

The shares closed down in regular trading.

Updated: As of 4:40 the shares had given up earlier gains and were waffling between small gains and losses.

10 Private Equity Managers That Outperform Their Peers

Preqin, in anticipation of the publication of its 2014 Private Equity Performance Monitor, has created league tables of private equity managers that have most consistently outperformed their peers.

Ten managers across three fund strategies — buyout, venture capital and funds of funds — received the highest possible score compared with similar league tables in 2013.

Preqin, which produces research on alternative investments, compiled the tables only from funds for which it had performance data and had assigned a quartile ranking. Top quartile funds were given a score of one, second quartile funds a score of two and so on. An average quartile ranking was then calculated.

Preqin assigned quartile rankings to private equity funds based on both the multiple and internal rate of return (IRR), taking into account the fund vintage, strategy and geographic focus.

The league tables excluded 2012, 2013 and 2014 vintage funds because these were too early in their fund lives to generate a meaningful IRR.

The lists comprised only active fund managers that had raised at least three funds of a similar strategy, and had either raised a fund in the past six years or were currently raising one of a similar strategy to their predecessor fund.

Four buyout managers achieved an average quartile score of 1.00, the best possible score:

Five venture capital fund managers achieved the best score of 1.00. All are U.S. based:

Only one fund-of-funds manager achieved the best average score of 1.00 in 2014: Nordea Private Equity,based in Denmark. The manager is a new entry to the league table this year.

ATP Private Equity Partners in Denmark and Morgan Stanley Alternative Investment Partners, which both had a score of 1.00 in 2013, had average quartile scores of 1.25 and 1.33, respectively, this year.

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